Faurecia Announces Full-year 2017 Results
AUBURN HILLS, Mich., Feb. 16, 2018 /PRNewswire/ --
-- STRONG PERFORMANCE IN 2017 WITH OPERATING MARGIN AT 7% OF SALES IN H2
-- 2018 GUIDANCE AHEAD OF ROADMAP
-- RECORD ORDER INTAKE AT EUR62BN, UP EUR9BN
-- ACCELERATION OF INNOVATION STRATEGY
-- PROPOSED DIVIDEND OF EUR1.10 PER SHARE, UP 22% YEAR-ON-YEAR
in EURm 2016 2017 Change
------- ---- ---- ------
Sales* 15,613.6 16,962.2 +10.6%**
----- -------- -------- -------
Operating income 970.2 1,170.3 +20.6%
as % of sales 6.2% 6.9% +70bps
------------- --- --- ------
Net income from continued
operations 532.5 714.5 +34.2%
------------------------- ----- ----- -----
Recurring net cash flow 332.5 435.3 +30.9%
----------------------- ----- ----- -----
Net debt at the end of the
period 341.5 451.5 +32.2%
-------------------------- ----- ----- -----
* Value-added sales ** On an organic basis All definitions are explained at the end of this Press Release, under the section "Definitions of terms used in this document"
STRONG PERFORMANCE IN 2017 WITH OPERATING MARGIN AT 7% OF SALES IN H2
-- Strong organic* sales growth of 10.6%, 830bps above worldwide automotive
production growth (+2.3%, source: IHS Automotive January 2018), to
EUR17.0 billion
-- Operating income up 20.6% to EUR1,170.3 million, representing 6.9% of
sales (+70bps yoy); in H2, operating income rose by 21.6% to 7.0% of
sales
-- Net income from continued operations up 34.2% to EUR714.5 million
-- Recurring net cash flow up 30.9% to EUR435.3 million
-- Solid financial structure with net debt at 0.2x EBITDA at year-end
2018 GUIDANCE AHEAD OF ROADMAP
-- FY 2018 sales growth of at least +7% (at constant currencies) i.e. at
least 500bps above worldwide automotive production growth (+2.0%,
source: IHS Automotive January 2018) leading to 2016-2018 CAGR of more
than 8% and 2016-2018 average outperformance of more than 600bps (ahead
of initial ambitions of +6% and 400bps)
-- FY 2018 operating margin above 7.0% of sales (ahead of initial ambition
of 7.0%)
-- FY 2018 net cash flow above EUR500 million (confirming initial ambition)
-- FY 2018 earnings per share of EUR5.00 (confirming initial ambition)
RECORD ORDER INTAKE
-- Three-year rolling order intake (2015-2017) of EUR62 billion, up EUR9
billion vs. 2014-2016
Patrick KOLLER, CEO of Faurecia
declared:
"Our 2017 performance confirmed our
ability to enhance value creation
through profitable growth and
deliver on targets whilst
continuing to invest in our
innovation strategy. Our order
intake is at a record high and our
financial structure is sound.
We remain strongly focused on
operational excellence and
accelerating the transformation of
Faurecia into an innovative "Tech
company". I thank all "Faurecians"
for their contribution to this
excellent year."
-----------------------------------
The 2017 consolidated financial statements have been approved by the Board of Directors at its meeting held on February 15, 2018, under the chairmanship of Michel de Rosen. These financial statements have been audited.
As previously announced, since January 1, 2017, Faurecia reports only value-added sales, which are total sales less monolith sales (a table in appendix details the reconciliation between total sales and value-added sales).
Upon application of accounting rule IFRS 5, the assets and liabilities sold as well as net income (loss) from discontinued operations have been isolated in distinct lines in the consolidated balance sheet and in the income statement. The impact of IFRS 5 application concerns only the Automotive Exteriors which was sold on July 29, 2016 and for which the final arbitration took place in October 2017.
GROUP OPERATING PERFORMANCE IN H2 2017:
ORGANIC SALES UP 12.8% AND OPERATING INCOME UP 22% TO 7.0% OF SALES (+80bps)
Faurecia's value-added sales reached EUR8,378 million in H2 2017, up 8.9% on a reported basis and up 12.8% on an organic basis, 1,150bps above worldwide automotive production growth (+1.3%, source: IHS Automotive January 2018)
-- All Business Groups posted solid organic growth of more than 9%
(Interiors posted the highest organic growth at +20.5%)
-- All regions significantly outperformed local automotive production
growth, including North America that posted a 1.1% organic growth
despite regional automotive production dropped by 7.3% year-on-year
Faurecia's operating income grew by 21.6% to EUR584 million; profitability rose by 80bps, to 7.0% of value-added sales
-- All Business Groups posted double-digit increase in operating income
-- All regions posted strong increase in operating income
GROUP OPERATING PERFORMANCE IN FY 2017:
ORGANIC SALES UP 10.6% AND OPERATING INCOME UP 21% TO 6.9% OF SALES (+70bps)
Faurecia's value-added sales reached EUR16,962 million in 2017, up 8.6% on a reported basis and up 10.6% on an organic basis, 830bps above worldwide automotive production growth (+2.3%, source: IHS Automotive January 2018)
-- All Business Groups posted solid organic growth of more than 8%
(Interiors posted the highest organic growth at +14.8%)
-- All regions significantly outperformed local automotive production
growth, including North America that posted a 5.6% organic growth
despite regional automotive production dropped by 4.0% year-on-year
-- By customer, the most remarkable developments came from Ford (+18%
organic), PSA (+17% organic), FCA (+42% organic), Cummins for commercial
vehicles (+39% organic), Volvo (+47% organic) and Chinese OEMs (+71%
organic)
Change in scope had a net negative effect of EUR117 million (-0.8%), due to the divestment of the Fountain Inn (USA) plant that occurred in H1 2016.
Change in currencies had a net negative effect of EUR191 million (-1.2%). By semester, it was a positive effect of EUR109 million in H1 and a negative effect of EUR300 million in H2.
Faurecia's operating income grew by 20.6% to EUR1,170 million; profitability rose by 70bps, to 6.9% of value-added sales
-- All Business Groups posted double-digit increase in operating income
-- All regions posted strong increase in operating income; in Europe and
Asia, operating income grew by 20% and 10% respectively while South
America confirmed its return to profitability, with a significant
upswing of EUR35 million in operating profit
SALES AND PROFITABILITY BY REGION
Europe (50% of Group sales): Record sales and profitability
Sales up 8.2% on an organic basis and operating income up 20%, at 6.2% of sales
-- Value-added sales totaled EUR8,500.4 million in 2017, compared to
EUR7,906.6 million in 2016. They were up 7.5% on a reported basis and up
8.2% on an organic basis, outperforming by 500bps automotive production
in Europe (incl. Russia) (+3.2%, source: IHS Automotive January
2018).Organic growth was driven by PSA (with the successful launches of
the new 3008 and 5008 SUVs), Ford, FCA and Volvo as well as the launch
at the end of the year of the new complete seats program for the VW
group (Audi Q8, VW Touareg, Porsche Cayenne).
-- Operating income reached EUR527.0 million in 2017 (vs. EUR440.0 million
in 2016), representing 6.2% of value-added sales, an increase of 60bps
year-on-year, leveraging operational efficiency.
North America (26% of Group sales): Improved performance despite tough market conditions
Sales up 5.6% on an organic basis and operating income up 8%, at 5.8% of sales
-- Value-added sales totaled EUR4,470.2 million in 2017, compared to
EUR4,432.7 million in 2016. They were up 0.8% on a reported basis and up
5.6% on an organic basis, outperforming by 960bps automotive production
in North America (-4.0%, source: IHS Automotive January 2018).Scope had
a negative impact of EUR117 million (-2.6%), resulting from the
divestment of the Fountain Inn (USA) plant in H1 2016.Currencies had an
additional negative impact of EUR92 million (-2.1%), mainly due to the
USD vs. the euro, of which a positive effect of EUR71 million in H1 and
a negative effect of EUR163 million in H2.Organic growth was driven by
Ford (with the complete seat for F-250), VW and Cummins (with the launch
of the new "Nitro" technology for commercial vehicles that started in
January 2017).
-- Operating income reached EUR257.6 million in 2017 (vs. EUR239.4 million
in 2016), representing 5.8% of value-added sales, an increase of 40bps
year-on-year, thanks to improved industrial efficiency.
Asia (17% of Group sales, incl. China representing 77% of the region's sales i.e. 13% of Group sales): Outstanding performance in China, driven by Chinese OEMs and SUVs
Sales up 18.1% on an organic basis and operating income up 10%, at 11.6% of sales
-- Value-added sales totaled EUR2,942.3 million in 2017, compared to
EUR2,557.2 million in 2016. They were up 15.1% on a reported basis and
up 18.1% on an organic basis, strongly outperforming automotive
production in Asia (+2.7%, source: IHS Automotive January
2018).Currencies had a negative impact of EUR78 million (-3.1%), mainly
due to the CNY vs. the euro.In China, organic growth stood at 19.7%,
strongly outperforming automotive production (+2.6% source: IHS
Automotive January 2018), and value-added sales to Chinese OEMs grew by
69% on an organic basis. Value-added sales in China totaled EUR2,251
million in 2017 (vs. EUR1,952 million in 2016), of which Chinese OEMs
represented 16% or EUR355 million (vs. 11% or EUR218 million in 2016).
-- Operating income reached EUR341.8 million in 2017 (vs. EUR310.4 million
in 2016), representing 11.6% of value-added sales.
South America (5% of Group sales): Dramatic turnaround in sales and profitability
Sales up 51.1% on an organic basis and return to profit with an upswing of EUR35 million in operating income from a loss of EUR23 million in 2016 to a profit of EUR12 million in 2017
-- Value-added sales totaled EUR788.0 million in 2017, compared to EUR509.6
million in 2016. They were up 54.6% on a reported basis and up 51.1% on
an organic basis, strongly outperforming automotive production in South
America (+19.7%, source: IHS Automotive January 2018).Currencies had a
positive impact of EUR18 million (+3.6%).
-- Operating income was a profit of EUR11.6 million in 2017 (vs. a loss of
EUR23.2 million in 2016), representing 1.5% of value-added sales and a
EUR34.8 million upswing year-on-year.
SALES AND PROFITABILITY BY BUSINESS GROUP
Seating (42% of Group sales)
Sales up 9.0% on an organic basis and operating income up 20%, at 5.8% of sales (+60bps)
-- Value-added sales totaled EUR7,132.9 million in 2017, compared to
EUR6,607.4 million in 2016. They were up 8.0% on a reported basis and up
9.0% on an organic basis, outperforming by 670bps worldwide automotive
production growth (+2.3%, source: IHS Automotive January 2018).Organic
sales grew by high single-digits in Europe and North America and by
double-digits in Asia and South America. Organic growth was mainly
driven by sales to PSA in Europe and Ford in North America.In China,
sales grew by 6% on an organic basis. In 2017, two new joint-ventures
for the Seating Business Group were signed with Chinese OEMs, Wuling and
BYD, that will contribute to future growth.
-- Operating income reached EUR410.9 million in 2017 (vs. EUR343.7 million
in 2016), representing 5.8% of value-added sales, an increase of 60bps
year-on-year.
Interiors (31% of Group sales)
Sales up 14.8% on an organic basis and operating income up 21%, at 5.6% of sales (+40bps)
-- Value-added sales totaled EUR5,336.1 million in 2017, compared to
EUR4,810.9 million in 2016. They were up 10.9% on a reported basis and
up 14.8% on an organic basis, strongly outperforming worldwide
automotive production growth (+2.3%, source: IHS Automotive January
2018). Sales were impacted by a negative scope effect of EUR117 million
(-2.4%), resulting from the divestment of the Fountain Inn (USA) plant
in H1 2016.Organic sales grew by 67% in Asia, boosted by China, and in
South America, where they more than doubled. Organic growth was mainly
driven by sales to Ford, FCA and Chinese OEMs. Sales in China more than
doubled on an organic basis (+104%). In 2017, a new joint-venture for
the Interiors Business Group was signed with Wuling. This will
contribute to future growth, along with the consolidation of Coagent,
also acquired in 2017.
-- Operating income reached EUR299.7 million in 2017 (vs. EUR247.9 million
in 2016), representing 5.6% of value-added sales, an increase of 40bps
year-on-year.
Clean Mobility (27% of Group sales)
Sales up 8.3% on an organic basis and operating income up 17%, at 10.2% of sales (+80bps)
-- Value-added sales totaled EUR4,493.2 million in 2017, compared to
EUR4,195.3 million in 2016. They were up 7.1% on a reported basis and up
8.3% on an organic basis, outperforming by 600bps worldwide automotive
production growth (+2.3%, source: IHS Automotive January 2018).Sales to
Cummins (+39% year-on-year) continued to be a significant growth driver;
commercial vehicle sales rose 41%, now representing 11% of the Clean
Mobility Business Group.In China, sales grew by 6% on an organic basis.
-- Operating income reached EUR459.7 million in 2017 (vs. EUR393.8 million
in 2016), representing 10.2% of value-added sales, a strong increase of
80bps year-on-year.
NET INCOME FROM CONTINUED OPERATIONS UP 34% TO EUR715 MILLION
Group operating income stood at EUR1,170.3 million, up 21% compared with EUR970.2 million in 2016.
-- Restructuring costs: net charge of EUR85.0 million vs. a net charge of
EUR86.3 million in 2016;
-- Other non-recurring operating income and expenses: net charge of EUR11.2
million vs. a net charge of EUR19.5 million in 2016;
-- Amortization of intangible assets acquired in business combinations: net
charge of EUR1.2 million in 2017;
-- Net financial result: net charge of EUR131.3 million vs. a net charge of
EUR162.4 million in 2016, which included a charge of EUR21 million
related to the anticipated reimbursement of the 2016 bonds;
-- Income tax: net charge of EUR261.8 million vs. a net charge of EUR189.2
million in 2016, mostly reflecting the increase in income before tax;
-- Share of net income of associates: profit of EUR34.6 million vs. a
profit of EUR19.7 million in 2016.
Net income from continued operations was a profit of EUR714.5 million, up 34% compared with EUR532.5 million in 2016.
Net result from discontinued operations was a profit of EUR188.3 million in 2016 (corresponding to the disposal of the Automotive Exteriors business) and a charge of EUR7.4 million in 2017 (corresponding to a minor adjustment to that disposal).
Net income before minority interests was a profit of EUR707.1 million, down 2% compared with EUR720.8 million in 2016.
Minority interests amounted to EUR96.9 million vs. EUR83.0 million in 2016.
As a result, consolidated net income (Group share) was a profit of EUR610.2 million, down 4% compared with EUR637.8 million in 2016.<s>
</s>
SOUND FINANCIAL STRUCTURE AND STRONG FINANCIAL FLEXIBILITY
EBITDA stood at EUR1,889.3 million, up 15% compared with EUR1,639.3 million in 2016.
-- Change in working capital requirement (including broadly stable
receivables factoring) was an inflow of EUR213.0 million vs. an inflow
of EUR162.5 million in 2016, reflecting tight control of all items.
-- Capital expenditure and capitalized R&D totaled EUR1,207.5 million vs.
EUR1,044.9 million in 2016, reflecting a higher number of programs
starting in 2017.
-- Restructuring represented an outflow of EUR88.3 million vs. an outflow
of EUR63.5 million in 2016.
-- Net financial expense was an outflow of EUR124.5 million vs. an outflow
of EUR132.0 million in 2016, reflecting better financial terms.
-- Income tax was an outflow of EUR286.5 million vs. an outflow of EUR257.7
million in 2016,
-- Other items including cash flow from discontinued operations was an
inflow of EUR39.8 million vs. an inflow of EUR154.8 million in 2016
(which included cash flow related to the disposal of the Automotive
Exteriors business).
Net cash flow stood at EUR435.3 million vs. EUR458.5 million in 2016 and recurring net cash flow of EUR435.3 million was up 31%, compared with EUR332.5 million in 2016.
Recurring net cash flow improved year-on-year both as a percentage of sales (2.6% of value-added sales in 2017 vs. 2.1% in 2016) and as a percentage of EBITDA (23% in 2017 vs. 20% in 2016).
-- Dividend paid (incl. minorities) was an outflow of EUR186.1 million vs.
an outflow of EUR165.0 million in 2016.
-- Share purchase was an outflow of EUR40.0 million vs. an outflow of
EUR24.8 million in 2016.
-- Net financial investments and other cash elements was an outflow of
EUR319.2 million vs. an inflow of EUR335.6 million in 2016. The 2017
outflow mainly corresponds to the initial investment in Parrot
Automotive, the increase from 35% to 51% in the JV for the
FCA-Pernambuco plant and the 50.1% stake in Coagent. The 2016 inflow
mainly corresponds to the disposal of the Automotive Exteriors business.
At December 31, 2017, the Group's net financial debt stood at EUR451.5 million vs. EUR341.5 million at December 31, 2016. It represented 0.2x EBITDA, a stable ratio year-on-year.
Faurecia boasts a sound financial structure with strong financial flexibility.
-- Over 70% of gross debt secured through bonds with no maturity before
2022,
-- Strong financial flexibility through an undrawn EUR1.2 billion
syndicated credit facility with maturity June 2021,
-- Significantly improved terms and conditions through recent refinancing
operations,
-- Faurecia remains attentive to market opportunities to further strengthen
its financial structure.
Faurecia's profitable growth and enhanced cash generation prospects recently led Moody's and Standard & Poor's to improve Faurecia's credit ratings: in October 2017, Moody's raised outlook to Positive and in January 2018, Standard & Poor's assigned BB+ with Stable outlook.
RECORD ORDER INTAKE (2015-2017) OF EUR62 BILLION, UP EUR9 BILLION
The Group's order intake (3-year rolling 2015-2017) of EUR62 billion is up EUR9 billion compared to last year (3-year rolling 2014-2016). This record figure demonstrates Faurecia's capability to attract new projects and customers (15 new customers in 2017) and increases confidence in profitable growth prospects.
ACCELERATION OF INNOVATION STRATEGY
In 2017, the Group invested in some important partnerships and acquisitions in order to accelerate the acquisition of new competences and expertise in the fields of Sustainable Mobility and Smart Life on Board, as well as for digital services.
Particularly noteworthy are the acquisition of Parrot Automotive and Coagent (China) in the fields of connectivity and infotainment and that of Hug Engineering for clean solutions for high horsepower engines.
The Group signed technology partnerships with ZF for advanced safety solutions and with Mahle for thermal management in the Cockpit of the Future. The first demonstration of the technologies from these partnerships was on display at the CES show in Las Vegas in January 2018.
Another important partnership was signed with Accenture for digital services and digital transformation.
Since its establishment in 2016, the investment fund Faurecia Ventures invested in seven startups.
In addition, the Group opened its first Innovation platform in Silicon Valley to accelerate relationships with the local ecosystem of startups and academic establishments.
The acceleration of the Group's innovation strategy translated into an increase in innovation spend of 23% to EUR160 million. The number of patent first filings also increased by 35% (from 244 in 2016 to 330 in 2017) to reach a total of 577 filings in 2017, including patent extensions.
PROPOSED DIVIDEND OF EUR1.10 PER SHARE, UP 22% YEAR-ON-YEAR
The Board of Directors will propose at the next Annual Shareholders' Meeting, to be held in Paris on May 29, the payment of a dividend of EUR1.10 per share, up 22% vs. the dividend of EUR0.90 paid last year. It will be paid in cash early June. The dividend increase reflects the Group's confidence in its capability to generate profitable growth and enhanced cash flow as well as its commitment to create shareholder value.
OUTLOOK
In the current environment and in line with the latest IHS forecast, Faurecia expects worldwide automotive production to grow by around 2%* in 2018 vs. 2017.
Based on this assumption* and continued momentum in building profitable growth, Faurecia targets for the full-year 2018:
-- Sales growth of at least +7% (at constant currencies) i.e. at least
500bps above worldwide automotive production growth,
-- Operating margin above 7% of sales,
-- Net cash flow of above EUR500 million,
-- Earnings per share of EUR5.00.
These targets exceed the 2018 ambitions that Faurecia announced at its April 2016 Capital Markets Day.
After the Capital Markets Day held in London on June 27, 2017 and focused on Sustainable Mobility, Faurecia will hold a new Capital Markets Day in Paris on May 15, which will focus on Smart Life on Board (Seating and Interiors) with an update on Sustainable Mobility.
* Main regional automotive production assumptions (PC + LV<3.5t):
Europe: at least +2%
North America: below +1%
China: at least +2%
2018 currency assumptions:
USD/EUR @ 1.20 on average
CNY/EUR @ 7.80 on average
Faurecia's financial presentation and financial report will be available at 10:30 am today (Paris time) on the Faurecia website: www.faurecia.com.
Calendar
April 20, 2018: Q1 2018 sales announcement (before market hours)
May 15, 2018: Capital Markets Day focused on Smart Life on Board (Paris)
May 29, 2018: Annual Shareholders' Meeting (Paris)
July 20, 2018: H1 2018 results announcement (before market hours)
October 4-14, 2018: Faurecia's presence at Paris Mondial de l'Auto
October 11, 2018: Q3 2018 sales announcement (before market hours)
About Faurecia
Founded in 1997, Faurecia has grown to become a major player in the global automotive industry. With 330 sites including 30 R&D centers, 110,000 employees in 35 countries, Faurecia is now a global leader in its three areas of business: automotive seating, interior systems and clean mobility. Faurecia has focused its technology strategy on providing solutions for smart life on board and sustainable mobility. In 2017, the Group posted total sales of EUR20.2 billion and value-added sales of EUR17.0 billion. Faurecia is listed on the NYSE Euronext Paris stock exchange and is a component of the CAC40 Next20 index. For more information, please visit www.faurecia.com
View original content:http://www.prnewswire.com/news-releases/faurecia-announces-full-year-2017-results-300600135.html
SOURCE Faurecia
